Intermediate-term Forecast for August 22, 2020

| August 22, 2020

Stock Market Commentary

We are 22 weeks into the rally phase of the intermediate-term cycle that began in March.

The magnitude of the last decline phase signals the likely transition to a bearish intermediate-term trend and favors additional losses during the next decline phase.

S&P 500 Index Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the S&P 500 index. For short-term outlooks, see the latest short-term forecast.

Technical Analysis

The index closed slightly higher this week, holding at recent highs of the uptrend from March. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

Cycle Analysis

We are 22 weeks into the rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending March 27. The intermediate-term cycle high (ITCH) is overdue and it could form at any time. The magnitude of the last decline phase signals the likely transition to a bearish translation and favors additional weakness. The window during which the next ITCL is likely to occur is now through September 25, with our best estimate being in the August 28 to September 25 range.

  • Last ITCL: March 27, 2019
  • Cycle Duration: 22 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: Now through September 25; best estimate in the August 28 to September 25 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A weekly close well above current levels would reconfirm the uptrend from March and forecast additional gains.
  • Bearish Scenario: A reversal and weekly close below the middle of the Bollinger bands at 3,081 would predict a return to the 200-week moving average at 2,739.

The bullish scenario is more likely (~70 probable).

Category: Forecasts, Intermediate-term Forecasts


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